Cycle to Work Scheme Savings Calculator UK 2026
Calculate exactly how much you can save on a new bike through the cycle to work scheme in 2026. This government-backed salary sacrifice scheme lets UK employees save between 32% and 47% on bikes and cycling equipment by paying from your gross salary before tax and National Insurance deductions.
Whether you want a standard commuter bike, a high-end road bike, or an electric bike, our calculator shows your exact monthly payments and total savings based on your current tax rate. Enter your salary and bike cost below to see how much you will save compared to buying with your take-home pay.
Enter your details to calculate your cycle to work scheme savings
How the Cycle to Work Scheme Works
The cycle to work scheme is a government initiative that makes buying a bike and cycling equipment more affordable through salary sacrifice. Instead of paying for a bike with your take-home salary after tax, you hire the bike from your employer and pay for it from your gross salary before tax deductions.
Check Your Eligibility
Confirm your employer offers a cycle to work scheme. Most UK employers participate, but check with your HR or payroll team about scheme limits and providers they use.
Choose Your Bike
Select a bike and accessories up to your employer's limit. Most schemes allow £1,000 to £3,000, with higher limits for electric bikes. The bike must be used mainly for commuting to work.
Apply Through Your Employer
Complete the application through your employer's cycle scheme provider. You will receive a certificate or voucher code to spend at participating bike shops or online retailers.
Salary Sacrifice Begins
Your gross salary reduces by the monthly hire amount for 12 to 18 months. This reduction happens before tax and National Insurance, creating your savings of 32% to 47%.
Use Your Bike
Ride your bike to work regularly during the hire period. You are responsible for maintenance, insurance, and repairs. The bike remains your employer's property during this time.
Take Ownership
After the hire period, pay a small final fee (typically 3% to 7% of the original value) to own the bike, or extend the hire for a longer period before taking ownership.
Key Point: Why You Save Money
The savings come from paying before tax and National Insurance. If you earn £30,000 and buy a £1,000 bike normally, you need to earn £1,470 gross to have £1,000 after tax. With the cycle scheme, you only sacrifice £1,000 gross, saving the £470 you would have paid in tax and NI. Compare this with other workplace benefits using our employee cost calculator.
Understanding Your Tax Savings in 2026
Your cycle to work scheme savings depend on your income tax rate and National Insurance contributions. The UK has three main tax brackets, each offering different savings levels on the same bike purchase.
| Tax Bracket | Income Range | Income Tax | NI Savings | Total Saving |
|---|---|---|---|---|
| Basic Rate | £12,571 - £50,270 | 20% | 12% | 32% |
| Higher Rate | £50,271 - £125,140 | 40% | 2% | 42% |
| Additional Rate | Over £125,140 | 45% | 2% | 47% |
Scottish taxpayers have different tax bands and rates. Scotland has five tax brackets ranging from 19% to 48%, which affects cycle scheme savings. Use the calculator above with the Scotland option selected for accurate figures based on Scottish Income Tax rates.
What Equipment Can You Buy?
The cycle to work scheme covers a wide range of cycling equipment beyond just the bike itself. All items must be safety equipment or necessary for commuting to work.
Eligible Items Include:
Bikes: Standard bikes, electric bikes (e-bikes), folding bikes, cargo bikes, mountain bikes, road bikes, hybrid bikes, and children's bikes for family cycling commutes.
Safety Equipment: Helmets, front and rear lights, bells, reflectors, hi-vis clothing, reflective accessories, mirrors, and bike alarms or GPS trackers.
Security: D-locks, cable locks, chain locks, ground anchors, and lock accessories.
Commuting Accessories: Panniers, baskets, bike bags, mudguards, racks, child seats, trailers, pumps, puncture repair kits, cycle computers, and maintenance tools.
Clothing: Waterproof jackets, cycling gloves, padded shorts, shoes suitable for cycling, and other weather-appropriate cycling gear necessary for commuting.
Important: The 50% Commuting Rule
To qualify for the tax relief, you must use the bike mainly for commuting to work. HMRC interprets "mainly" as more than 50% of the bike's use. You do not need to cycle every day, but the primary purpose should be work commuting rather than purely leisure cycling. If HMRC believes the bike is mainly for personal use, they can withdraw the tax relief and charge you for the benefit. Keep records of your commuting to demonstrate compliance if questioned.
Scheme Limits and Restrictions
While HMRC does not set a maximum limit for cycle to work schemes, most employers impose their own limits based on their chosen scheme provider. Understanding these limits helps you plan your application effectively.
Common employer limits range from £1,000 for standard schemes to £3,000 for enhanced schemes. Some employers offer up to £5,000 or £10,000 specifically for electric bikes, recognising their higher cost. If your desired bike exceeds your employer's limit, you may be able to supplement the difference from your own money, though not all schemes permit this.
You can only have one active cycle scheme agreement at a time with the same employer. After completing or paying off your current bike, you must wait 12 months before applying for another scheme. This restriction applies even if you paid off the bike early. For help calculating whether to upgrade immediately or wait, check our salary increase calculator to see if a future pay rise would offer better savings.
Real Cycle to Work Scheme Examples
See exactly how much different people save with the cycle to work scheme based on their salary and bike choice. These examples use 2026 tax rates and show the complete savings picture.
Example 1: Sarah - Basic Rate Taxpayer
Situation: Sarah earns £28,000 per year and wants to buy a £800 hybrid bike for her 5-mile commute to work in Manchester.
Scheme Details
- Bike cost: £800
- Hire period: 12 months
- Tax rate: 20% (basic)
- NI rate: 12%
- Monthly gross payment: £66.67
Sarah's Total Savings: £256 (32%)
She pays £544 total instead of £800. Her monthly take-home pay reduces by just £45 instead of £66.67, making it very affordable. After 12 months, she pays a £24 final fee (3%) to own the bike, bringing her total cost to £568 - still a saving of £232.
Example 2: James - Higher Rate Taxpayer
Situation: James earns £65,000 and wants to purchase a £2,500 electric bike for his 12-mile commute from Reading to London.
Scheme Details
- E-bike cost: £2,500
- Hire period: 18 months
- Tax rate: 40% (higher)
- NI rate: 2%
- Monthly gross payment: £138.89
James's Total Savings: £1,050 (42%)
He pays £1,450 total instead of £2,500. His monthly net reduction is only £80.56 rather than £138.89. Over 18 months, this manageable payment gives him access to a premium e-bike. With a 7% final payment of £175, his total cost is £1,625 - saving £875 overall. He also saves approximately £2,400 per year on train fares.
Example 3: Priya - Accessories Only
Situation: Priya already owns a bike but needs quality accessories. She earns £35,000 and wants £500 worth of equipment including panniers, lights, helmet, and waterproof clothing.
Scheme Details
- Accessories cost: £500
- Hire period: 12 months
- Tax rate: 20% (basic)
- NI rate: 12%
- Monthly gross payment: £41.67
Priya's Total Savings: £160 (32%)
She pays £340 instead of £500 for high-quality cycling gear. Her monthly take-home reduces by only £28 rather than £41.67. With a £15 final payment (3%), her total cost is £355, saving £145. This makes investing in proper safety and commuting equipment much more affordable.
Example 4: Michael - Additional Rate Taxpayer
Situation: Michael earns £140,000 and wants a high-end £4,000 road bike and equipment package for his fitness-focused commute.
Scheme Details
- Bike package cost: £4,000
- Hire period: 18 months
- Tax rate: 45% (additional)
- NI rate: 2%
- Monthly gross payment: £222.22
Michael's Total Savings: £1,880 (47%)
He pays £2,120 instead of £4,000. His monthly net impact is only £117.78 for 18 months. Even with a 7% final payment of £280, his total cost is £2,400 - a massive saving of £1,600. The additional rate tax band provides the highest possible savings, making premium bikes very cost-effective.
These examples demonstrate how the cycle to work scheme offers substantial savings across all income levels, with higher earners benefiting most from the progressive tax system. Calculate your personal savings using the tool above, or explore how other salary adjustments affect your take-home pay.
Frequently Asked Questions
How much can I save with the cycle to work scheme in 2026?
In 2026, you can save between 28% and 47% on the cost of a bike and cycling equipment through the cycle to work scheme, depending on your tax bracket. Basic rate taxpayers (20%) save approximately 32% including National Insurance savings of 12%. Higher rate taxpayers (40%) save around 42% with combined tax and NI savings. Additional rate taxpayers (45%) can save up to 47% on their purchase. These savings come from salary sacrifice, where you pay from your gross salary before tax and National Insurance deductions. For example, on a £1,000 bike, a basic rate taxpayer saves around £320, a higher rate taxpayer saves £420, and an additional rate taxpayer saves £470. The exact savings depend on your annual salary, tax code, and whether you pay Scottish income tax rates.
What is the maximum bike value for cycle to work scheme 2026?
There is no legal maximum limit for the cycle to work scheme set by HMRC in 2026. However, most employers set their own limits, commonly ranging from £1,000 to £3,000 depending on the scheme provider they use. Some employers offer higher limits of £5,000 or even £10,000 for electric bikes and specialist cycling equipment. The scheme covers not just the bike itself but also safety equipment like helmets, lights, locks, reflective clothing, and panniers. If you need equipment above your employer's limit, you may be able to make up the difference separately or wait and apply again after 12 months. Check with your HR department or payroll team about your specific employer's cycle scheme limit and whether they offer enhanced limits for electric bikes.
How does salary sacrifice work for bikes?
Salary sacrifice for bikes works by exchanging part of your gross salary for a non-cash benefit, in this case hiring a bicycle and equipment from your employer. Instead of buying a bike with your take-home pay after tax, you agree to reduce your gross salary temporarily by the bike's cost, spread over 12 to 18 months. Your employer purchases or leases the bike and hires it to you for the agreement period. Because the hire payments come from your pre-tax salary, you avoid paying income tax and National Insurance on that portion of your earnings, creating substantial savings. For example, if your annual salary is £30,000 and you sacrifice £1,000 over 12 months, you would pay approximately £83 per month gross rather than £83 net. This reduces your taxable income to £29,000 for that year. After the hire period ends, you typically have the option to purchase the bike for a small final payment, often 3% to 7% of the original value, or extend the hire agreement.
Can I use the cycle to work scheme for an electric bike?
Yes, you can absolutely use the cycle to work scheme for an electric bike in 2026. Electric bikes, also called e-bikes or electrically assisted pedal cycles, are fully eligible as long as they meet UK legal requirements with a maximum motor power of 250 watts and assistance cutting out at 15.5mph. Many employers now offer higher scheme limits specifically for electric bikes, recognising their higher cost, typically £2,000 to £5,000 or more. The same tax savings apply to electric bikes as regular bikes, meaning you can save 32% to 47% depending on your tax rate. Electric bikes are particularly popular for longer commutes, hilly routes, or for those who want to arrive at work less sweaty. You can also include the battery, charger, and other e-bike specific accessories in your scheme application. Some employers may require that the electric bike is your primary commuting method for a certain number of days per week to qualify for the full tax relief.
Do I own the bike after the cycle to work scheme?
You do not automatically own the bike immediately after the cycle to work scheme hire period ends. Technically, the bike remains the property of your employer or the lease company. However, you have several options at the end of the hire agreement, typically after 12 to 18 months. The most common option is to pay a final ownership fee, usually 3% to 7% of the bike's original value for longer hire periods, or up to 25% for shorter agreements. For a £1,000 bike on an 18-month agreement, this might be £30 to £70. Alternatively, you can extend the hire period for a nominal fee like £1 per year for an additional period, after which ownership transfers to you for free. Some employers donate the bike to you after an extended hire. The specific options depend on your employer's scheme and HMRC valuation tables. You cannot buy the bike immediately at the end of the hire period at market value, as this would be treated as a taxable benefit and reduce your savings.
What happens to cycle to work scheme if I leave my job?
If you leave your job during the cycle to work scheme hire period, you typically have several options depending on your employer's policy and scheme provider. The most common scenario is that you must pay the outstanding balance in one lump sum, either from your final salary payment or separately. This outstanding amount is usually the remaining gross salary sacrifice amount, not the post-tax equivalent, which still gives you savings on the portion already paid. Some employers may allow you to continue making payments for a few months after leaving, though this is less common. In some cases, you might need to return the bike to your employer if you cannot pay the balance. If you have completed the hire period but not yet taken ownership, you can usually still complete the ownership transfer by paying the final fee before leaving or shortly after. It is important to check your cycle scheme agreement before applying if you think you might change jobs soon. If you are moving to a new employer, you cannot transfer the scheme, but you could potentially start a new application with your new employer after a waiting period.
Can I buy accessories only through the scheme?
Yes, you can use the cycle to work scheme to buy accessories only without purchasing a bike, as long as your employer's scheme allows it and you already own a bicycle that you use for commuting. Eligible accessories include essential safety equipment like helmets, lights (front and rear), locks, bells, reflective clothing, and high-visibility gear. You can also get practical commuting items such as panniers, baskets, bike bags, mudguards, puncture repair kits, pumps, cycle computers, and appropriate cycling clothing like waterproof jackets and gloves. Some schemes allow maintenance packages or bike servicing as part of the accessories budget. The same tax savings of 32% to 47% apply to accessories as they do to bikes. However, there is usually a minimum and maximum value for accessory-only applications, often between £150 and £1,000. The key requirement is that the accessories must be used primarily for commuting to work, not purely for leisure cycling. If you already used the scheme for a bike, you typically must wait 12 months before applying again for accessories only.
Does the cycle to work scheme affect my pension?
Yes, the cycle to work scheme can affect your pension contributions, but the impact depends on how your pension is calculated. If your pension contributions are based on your gross salary before salary sacrifice, then the scheme will reduce your pensionable earnings and therefore reduce your pension contributions slightly during the hire period. For example, if you earn £30,000 and sacrifice £1,000 for a bike over 12 months, your pensionable salary might reduce to £29,000, meaning both you and your employer contribute pension based on this lower amount. Over a 12-month period with a 5% employee contribution, you would save £50 in pension contributions but also receive £50 less in your pension pot. However, many employers protect pension contributions by calculating them on your pre-sacrifice salary, meaning no impact to your pension. Some workplace pensions calculate contributions on basic salary only, which would not be affected. For most people, the immediate tax savings of 32% to 47% outweigh the small temporary pension impact, especially considering you can increase your pension contributions after the bike is paid off. Always check your specific pension scheme rules with your HR department before applying.
How many times can I use the cycle to work scheme?
You can use the cycle to work scheme multiple times throughout your employment, but there are restrictions on frequency. The standard rule is that you must wait at least 12 months from the start of your previous cycle scheme agreement before applying for a new one. This means if you started a bike agreement in January 2025, you could apply for another bike or accessories from January 2026 onwards. You cannot run two cycle scheme agreements simultaneously with the same employer. The 12-month rule applies even if you have finished paying for your previous bike early or if you want to get accessories after getting a bike. Some employers may have stricter policies, requiring you to wait until your previous agreement is fully completed including any extended hire period. There is no limit to the total number of times you can use the scheme over your career, as long as you follow the spacing rules. This makes the scheme useful for upgrading bikes, getting a second bike for different purposes like a road bike and a mountain bike, or replacing bikes as children grow and inherit your previous bikes. Each application is treated independently for tax relief purposes.
Is the cycle to work scheme worth it?
The cycle to work scheme is definitely worth it for most employees who commute by bike or plan to start cycling to work regularly. The financial savings of 32% to 47% represent significant value, especially on higher-priced bikes and electric bikes costing £1,500 to £3,000 or more. For a £2,000 electric bike, a higher rate taxpayer saves around £840, making the effective cost just £1,160. Beyond the financial savings, the scheme spreads the cost interest-free over 12 to 18 months, making expensive bikes affordable without upfront payment or credit checks. The scheme encourages healthier commuting, saves money on fuel or public transport, and reduces your carbon footprint. Cycling to work regularly can save £1,000 or more per year on commuting costs. However, the scheme may not be worthwhile if you rarely cycle to work, if your commute is impractical for cycling, if you are close to retirement and concerned about pension impacts, or if you might change jobs soon and cannot afford to pay the remaining balance. You must also genuinely intend to use the bike mainly for commuting, not purely for leisure, to comply with HMRC rules. Overall, for regular bike commuters, the scheme offers excellent value and is one of the best employee benefits available.
Data Sources and Accuracy
This cycle to work scheme savings calculator uses official UK government tax rates and National Insurance contribution rates for the 2026/27 tax year. All calculations are based on current HMRC guidance for salary sacrifice schemes and cycle to work benefits.
Official Sources:
- GOV.UK Cycle to Work Scheme Guidance
- HMRC Income Tax Rates 2026/27
- National Insurance Contribution Rates
- Scottish Income Tax Rates
Calculation Methodology: The calculator computes your tax savings by determining your effective tax rate based on your annual salary, then calculating the reduction in income tax and National Insurance contributions when salary sacrifice is applied. Monthly payments are calculated by dividing the total bike cost by the hire period months. Final ownership fees are estimated at 3% to 7% based on HMRC fair market value guidelines for used bikes.
Important Disclaimer: This calculator provides estimates for planning purposes only. Your actual savings may vary depending on your specific circumstances, tax code, pension arrangements, other salary sacrifice schemes, and your employer's specific cycle scheme terms. The calculator assumes you remain employed throughout the hire period and do not have any P11D benefits that affect your tax code. Always verify figures with your employer's payroll department before committing to a cycle scheme agreement. This tool does not constitute financial advice. Last updated: January 2026.
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